Troy-based McGraw Wentworth, Michigan’s largest employee group benefit brokerage and consulting firm, released the results of its 2011 Southeast Michigan Mid-Market Group Benefits Survey over the weekend.

The annual survey, now in its eighth year, tracks health benefits and cost trends for the current year — including decision-making around health reform — among 470 southeast Michigan-based organizations with between 100 and 10,000 employees.

* Employer health care costs after plan changes increased by an average of 8 percent for employers in the survey.
* TrendBenders — high-performing organizations with the lowest average annual increases over two years — are aggressively focused on Consumer Driven Health Plans and wellness and less on cost-shifting. Their health benefit plan cost increases averaged 4 percent or lower over two years after plan design changes.
* Significantly fewer Michigan employers offer “free” coverage. Only 10 percent (down from 15 percent in 2010) offer family coverage at no cost.
* CDHPs are increasingly prevalent. A CDHP typically combines a high deductible plan with lower monthly contributions; employees assume greater financial and health care purchasing responsibility. In 2011, 27 percent of employers — compared to 19 percent in 2009 — offer CDHPs, with more employers, 5 percent, offering a CDHP as the only plan option.
* Preferred Provider Organizations continue to dominate enrollment. HMOs remain a good cost competitive option due to innovative, wellness-centered plan designs.

When asked about the impact of health reform, employers attribute 1 to 3 percent of this year’s average 8 percent increase in health benefit costs to health care reform mandates such as extending coverage for dependents to age 26.

Only 7 percent of mid-size employers anticipate discontinuing their health plans due to availability of insurance exchanges in 2014. Some 49 percent plan to offer health coverage despite availability, similar costs of the exchanges.

“Mid-sized employers are considering the impact of health reform but few indicate they will eliminate group health plan coverage,” says Julie Truskowski, account director with McGraw Wentworth and survey leader. “Employers are looking closely at the ‘play or pay’ aspects of health reform and the status of their health plans. Employers need to make strategic decisions before 2014 to accommodate health care reform mandates.”

The survey cites 112 top-performing organizations, both union and non-union, as TrendBenders that have been successful in keeping their average benefit cost increases at or below 4 percent over two consecutive years. As early adopters of consumer-driven health plans and wellness options, TrendBender organizations are more proactive in steering participants to most cost-effective options, and report higher enrollment in these plan offerings.

The Survey analysis also includes a Total Cost Ratio comparing what Michigan employers and employees are paying in total for PPO, HMO or CDHP coverage in 2011. The Total Cost Ratio in 2011 for a median PPO Plan for an individual was $606 per month of which the employer paid 56 percent, or $339, in premiums and the employee paid 44 percent, or $267, a combination of payroll deduction $105, deductibles and co-pays $162. In 2010, the Total Cost Ratio was $580 per month (employer paid 57 percent or $329; employee paid 43 percent of $251).

The McGraw Wentworth Mid-Market Group Benefits Survey is the largest of its kind. Respondents represent diverse industries with 25 percent considered auto suppliers and 30 percent having some unionized employees. The survey has a 3.8 percentage point margin of error.